Thursday, April 15, 2010

Europe's take on net neutrality

Speaking at the ARCEP conference in Paris earlier this week, Neelie Kroes, European Commissioner for the Digital Agenda (and Viviane Reding's successor), set out her views on net neutrality.

She began by recognising the complexity of the issue, suggesting "that each party knows that the internet is not an inherently neutral platform; that there are choices to be made", a statement which many US campaigners would do well to acknowledge. She also recognised that the debate in Europe is at an early stage and that in many ways we are in a more fortunate position than other administrations:
"This debate is still at an early stage in Europe. This is probably because our regulatory framework and the competitive investments that it fostered meant that we have not been so immediately confronted with these tough choices as in some other jurisdictions. Of course, we need to anticipate potential problems. However, as we do so, we must also avoid over-hasty regulatory intervention."
Kroes stated her agreement with the FCC's four principles, set out in 2005, and, while welcoming the proposed addition of the principle on transparency, she sounded a note of caution with regard to the proposed principle on non-discrimination:
"While the importance of increased transparency is clear, the real meaning and consequences of the non-discrimination principle should be carefully considered. In fact, some are interpreting the non-discrimination principle as essentially preventing telecom operators from seeking commercial payments or agreements with content providers which deliver their highly capacity-consuming services through broadband networks and require a certain level of service for their transmission to be effective. That prospect raises a number of delicate and complex issues. These issues must be very carefully assessed before the EU gives any possible regulatory response."
She flagged both the EU's new regulatory framework, adopted in 2009, and also the forthcoming NGA Recommendation and Spectrum Policy, "both of which will foster investment in efficient and open networks." She also offered an interesting traffic management analogy:
"Given that so much of this debate is about different forms of traffic management, let me use a road traffic analogy. There are many ways to manage traffic: by improving infrastructure, adding tolls, creating junctions or roundabouts to improve bottlenecks. But creating new rules and crowding the street with signs does not automatically help the traffic to flow. Indeed, putting a police officer at a busy corner can often deliver the slowest traffic of all. So, I will not be someone who comes up with a solution first and then looks for a problem to attach it to. I am not a police officer in search of a busy corner."
She closed by stating her adherence to the following principles:
  • freedom of expression is fundamental
  • transparency is non-negotiable (network management activities and implications must be "crystal clear")
  • we need investment in efficient and open networks (the best way "to avoid bottlenecks and monopolistic gatekeepers" is to throw bandwidth at the problem?)
  • fair competition (with no discrimination against undesired competitors)
  • support for innovation (in terms of new businesses and business models)
In many ways, I think one of her closing remarks (in relation to the final bullet above) demonstrates one of the clearest insights I've yet seen in the whole net neutrality saga:
"...over time, we should continue to monitor whether traffic management is a spur to future network investment, and not a means of exploiting current network constraints."
All in all, far more encouraging than concerning, with a clear (and rather refreshing) grasp of the key issues? I'm not sure that the FT (Telecoms groups warned on data charges) quite "got it" though:
"Telecoms companies will not be allowed to charge online content providers to deliver high-bandwidth content to internet users, the European Union telecoms commissioner said yesterday. Neelie Kroes said she would take action if companies such as Telef├│nica and France Telecom sought payments in exchange for carrying bandwith-guzzling services such as Google's popular YouTube video-sharing website."
Er, I don't think she did, actually? Rather, she said that there are a range of issues to be considered and that we need to avoid "over-hasty regulatory intervention"? TelecomPaper's report is better and offers some interesting coverage of the debate that followed:
"...representatives of companies such as Google, Yahoo! and Skype responded to European operators’ revenue-sharing ambitions by arguing that it was their services that gave value to networks. Dailymotion’s Martin Rogard, for example, said that since operators received all of end-users’ subscription fees it was normal for them to make the investment in their networks. Yves Gassot, the managing director of European market research consultant Idate, said that Google and Yahoo! have already developed very significant infrastructure to control their services’ quality. If operators want them to pay even more, then they may wake up one day and see they are not the only ones with networks, he added. Vodafone’s executive director and head of European operations, Michel Combe, told the newspaper that the operator had no reason to ask Google to pay it for offering the search engine to customers, but revenue sharing is relevant for content such as video. He also referred to Vodafone’s introduction of differentiated tariffs for business mobile internet customers in Spain in February, where some clients pay less for “best effort” service quality while others pay a premium for guaranteed speeds and priority at times of network congestion. To Vodafone, this does not violate the principles of net neutrality, but allows innovation and new economic models to emerge."
The comment about operators discovering they're "not the only ones with networks" seems very prescient, especially in the light of Google's fibre ambitions. And I think Vodafone's differentiated tariffs fit with Neelie Kroes' views, so long as transparency is provided? But does such a tariffing approach constitute a spur to future network investment, or a means of exploiting current network constraints?

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